Bengaluru: Peak XV-backed Foxy, a beauty ecommerce platform, is shifting focus to offer consultative services, including skincare advice to customers, said a person familiar with the matter, requesting anonymity.
Lightspeed India, along with existing investors Matrix Partners and Peak XV (formerly Sequoia Capital), is expected to infuse more than $10 million to support the company’s strategic shift.
“Foxy is no longer in direct competition with mass-market companies like Nykaa, due to the increasing challenges for smaller players to enter the beauty retailing space dominated by larger firms.” The company will transition to consultative selling of skincare products tailored to individual skin needs, the person added.
Foxy’s founder and chief executive officer Kartik Sheth confirmed the development.
However, Lightspeed and Matrix did not respond to Mint’s queries. Peak XV declined to comment.
In the past five years, India’s beauty market has witnessed significant growth, with major players like Amazon and Flipkart, as well as newer entrants such as Swiggy, Zepto and Blinkit, entering the fray.
“If you see across the board, beauty platforms are really struggling for growth, and resorting to discounts to drive more customers… so how independent beauty marketplaces will continue to thrive has been a little bit of a question mark,” Sheth said. Aquiring new customers has been hard, he added.
Established in 2018, Foxy, operated by EkAnek Networks, was initially conceived as a commerce platform for GenZ, facilitating the purchase of beauty, grooming, and personal care products. It was founded with the aim of discovering new brands in a market saturated with counterfeits. Some of Foxy’s top brands include Pee Safe, Anveya, WOW Skin Science, Plum, The Ayurveda Co., and Bombay Shaving Co.
However, while the company intends to maintain its marketplace offerings, it no longer sees much value in pursuing its original vision. “There were spaces in the marketplace which we were going after, but those spaces have dried up…so there is no point being a small player in a very big pool of other large players who are also struggling to acquire customers for the platform,” Sheth said.
“Therefore, the focus now is to solve real beauty problems for customers, which means working with smaller brands at a more problem-solution oriented level.”
With this strategic shift, Foxy will leverage its existing infrastructure to expand its offerings in the beauty-tech consultative space. The firm expects its efficient tech platform, well-allocated capital, and high conversion rates from a loyal customer base to support favorable unit economics, and maintain its lean business model.
The company offers a range of tech-based tools, including selfie-analysis, allowing users to take photos through its app and website to receive consultations from experts on relevant products within its brand ecosystem.
Foxy comprises a 50-member team across tech, brands, human resources, finance, and customer service.
In FY23, parent entity EkAnek’s revenue surged by 261% to ₹38.8 crore, but its expenses also rose by 83% to ₹67 crore. According to company filings sourced by Tofler, it reported a loss of ₹28 crore.
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